EXHIBIT 10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“ Agreement ”) is entered into by and between
Eclipsys Corporation, a Delaware corporation (the “
Company ”), and Philip M. Pead, an individual (“
Executive ”), effective May 14, 2009.
WHEREAS, the Company desires to
employ Executive, and Executive desires to be employed by the
Company, on the terms set forth herein;
NOW THEREFORE, in consideration of
the mutual obligations in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Executive and the Company hereby agree as
follows:
1. Employment
.
(a) Positions . The
Company shall employ Executive, and Executive shall serve, as the
Company’s Chief Executive Officer, and Executive shall have
customary powers, responsibilities, authorities and reporting
relationships of the position of a chief executive officer of a
public company, and such additional powers, responsibilities and
authorities, as may be specified from time to time by the
Company’s Board of Directors (the “ Board
”). Executive shall report directly to the Board, and all
other officers and employees of the Company shall report directly
or indirectly to Executive, subject to other reporting as may be
required by the Board based upon corporate governance concerns,
such as alternate reporting of the internal audit function.
(b) Company Duties .
Executive shall devote Executive’s reasonable best efforts to
the performance of Executive’s duties and responsibilities to
the Company. Executive will not be employed by, consult for, or
serve as a director of any for-profit entity without approval of
the Board, except that Executive may continue to serve as a
director of Emdeon, which Executive is serving as of the date of
this Agreement. However, nothing in this Agreement shall preclude
Executive from engaging in charitable and community affairs;
managing any passive investment ( i.e. , an investment with
respect to which the Executive is in no way involved with the
management or operation of the entity in which the Executive has
invested) made by him in publicly traded equity securities or other
property (provided that no such investment may exceed five percent
(5%) of the equity of any entity, without the prior approval of the
Board); or serving as a member of the board of directors or as a
trustee of any non-profit organization that maintains liability
insurance reasonably satisfactory to the Company under which
Executive is an insured person entitled to defense and indemnity
for claims brought against Executive as a result of or in
connection with Executive’s service, in any event to the
extent that any of the above activities do not present an actual or
potential conflict of interest or interfere with Executive’s
ability to discharge Executive’s duties to the Company.
(c) Location .
Executive’s primary office location will be the
Company’s headquarters in the Atlanta, Georgia area. When not
traveling for business purposes Executive will generally be present
at Executive’s primary office location during the normal work
week.
2. Term of
Employment . Executive is an at-will employee;
Executive’s employment may be terminated by the Company or
Executive at any time for any reason or no reason and without any
obligation except as set forth in this Agreement and any other
written agreement between Executive and the Company.
Executive’s term of employment (“ Term of
Employment ”) commenced on May 14, 2009, and,
subject to the terms hereof, shall terminate on the date that
Executive or the Company terminates Executive’s
employment.
3. Compensation
.
(a) Salary . During the
Term of Employment the Company shall pay Executive a base salary
(“ Base Salary ”), which shall initially be at
the annualized rate of $650,000, in accordance with the ordinary
payroll practices of the Company and subject to all applicable
federal, state and local withholding and reporting requirements.
The Board or the Compensation Committee of the Board shall review,
and may, subject to Executive’s right to terminate employment
for Good Reason pursuant to Section 6(a) as a result of any
reduction in Base Salary, adjust Executive’s Base Salary at
any time and from time to time. If the Base Salary is adjusted, the
adjusted amount shall become the Base Salary for purposes of this
Agreement.
(b) Bonus Plan . For
purposes of the Company’s 2009 Corporate Bonus Plan (the
“ 2009 Plan ”), Executive’s target bonus
will be $413,150 (the “ Guaranteed Amount ”),
which will be paid no later than March 15, 2010 if Executive
is still employed by the Company on that date. If and to the extent
that the actual bonus payable to Executive pursuant to the 2009
Plan is less than the Guaranteed Amount, the Company will pay the
gross amount of the shortfall to Executive outside of the 2009
Plan. Executive may earn a bonus for 2009 in excess of the
Guaranteed Amount pursuant to the 2009 Plan, but no bonus for 2009
in excess of the Guaranteed Amount is promised. During the Term of
Employment for 2010 and later years, Executive will have a target
bonus as specified by the Board or the Compensation Committee of
the Board (“ Target Bonus ”), which Target Bonus
shall be no less than 100% of Executive’s Base Salary on the
date the bonus year begins. The Target Bonus shall be governed by,
and payable if at all in accordance with, the Company’s
executive bonus plan, as such plan may be modified from time to
time, with the actual bonus earned being based on achieving such
performance targets and management objectives as may be established
by the Board or the Compensation Committee of the Board each year.
The Board or the Compensation Committee of the Board shall review,
and may, subject to Executive’s right to terminate employment
for Good Reason pursuant to Section 6(a) as a result of any
reduction in Target Bonus, adjust Executive’s Target Bonus at
any time and from time to time. If the Target Bonus is adjusted,
the adjusted amount shall become the Target Bonus for purposes of
this Agreement. Except as set forth in the first sentence of this
section, no bonus payments are guaranteed. All bonus payments shall
be subject to all applicable federal, state and local withholding
and reporting requirements.
(c) Equity Awards .
Initial equity awards made to Executive are reflected in
Exhibit A to this Agreement. No promises are made
regarding additional equity awards and Executive should not expect
to participate in any 2010 equity awards.
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4. Employee Benefits .
(a) Benefit Programs .
During the Term of Employment, the Company shall provide Executive
with coverage under, and pursuant to the terms of, any welfare
benefit programs and other compensatory and benefit programs, plans
and practices that the Company makes available to its executive
officers as designated by the Board from time to time.
(b) Vacation . Executive
shall be entitled to five weeks of paid vacation each calendar
year, pro-rated for partial years of employment, which shall accrue
ratably during the year and be taken at such times as are
consistent with the Executive’s duties and responsibilities
to the Company; provided, however, subject to applicable law, that
the Executive shall not be entitled to carry over unused vacation
from year to year in an amount exceeding that which the Executive
would be entitled to carry over in accordance with the
Company’s standard vacation policy as applied to employees
who live in Executive’s state of residence.
(c) Other Benefits . As
long as Executive’s primary residence is not in the same area
as Executive’s primary office location, the Company shall
continue to provide, or reimburse Executive for, the executive
housing he is using on the date he signs this Agreement or, if he
elects to move to new executive work-week housing in the area of
Executive’s primary office location, provide, or reimburse
Executive for, reasonable executive housing near Executive’s
primary office location, subject to approval by the Chairman of the
Board of the cost thereof. Executive will be entitled to
reimbursement of reasonable expenses incurred by him for an annual
physical examination, to the extent such an examination is not
otherwise covered or provided by the health insurance or health
benefits provided by the Company to Executive pursuant to
Section 4(a). The Company promptly on demand shall reimburse
Executive for his legal expenses to negotiate this Agreement,
provided such reimbursement shall not exceed $25,000.
5. Expenses .
Subject to prevailing Company policy or such guidelines as may be
established by the Board from time to time, the Company shall
reimburse Executive for all reasonable expenses incurred by
Executive in carrying out Executive’s duties and
responsibilities to the Company, provided that Executive will bear
all expenses associated with commuting between his home and his
primary office location .
6. Termination of
Employment .
(a) Termination Without
Cause or for Good Reason . If the Company terminates
Executive’s employment for any reason other than Cause (as
defined in Section 6(c)), Executive’s Disability (as
defined in Section 6(e)), or Executive’s death, or if
the Executive’s employment is terminated by the Executive for
Good Reason (as defined in Section 6(a)(2)), then the Company
shall pay the Executive (x) the Accrued Amounts (as defined
below) and (y) subject to the following sentence, the
Severance Package. The payment of the Severance Package to
Executive under this Section 6(a) shall (i) be subject to
Section 6(i) (Loss of Severance); (ii) constitute the sole
remedy of Executive in the event of a termination of
Executive’s employment; and (iii) be contingent upon the
execution and delivery to the Company by the Executive not later
than 45 days after the date of termination of employment, and
the effectiveness following any period of revocation, of a general
release in favor of the Company in substantially the form attached
hereto as Exhibit C , provided that if changes or
expansions of relevant laws and regulations would result in
Exhibit C in the form thereof as of the date of this
Agreement failing to achieve the intent thereof as reflected by the
form thereof as of the date of this Agreement (the “
Initial Intent ”), and if it is possible to modify
Exhibit C so as to effect the Initial Intent
notwithstanding such changes or expansions of relevant laws or
regulations, then Exhibit C will be modified to the
extent necessary to preserve the Initial Intent (the “
Release ”). Except as expressly provided herein or in
another agreement between the Company and Executive, the Severance
Package shall not be subject to any duty to mitigate damages by
Executive, or any set-off or reduction due to Executive’s
post-termination employment, provided such post-termination
employment does not contravene any obligation of Executive to the
Company. The Accrued Amounts shall be payable in a lump sum within
ten (10) days of termination of employment.
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(1)
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For purposes of this Agreement, the “
Accrued Amounts ” shall mean the Executive’s
Base Salary, any unpaid portion of the Guaranteed Amount, any
earned and declared but unpaid bonus, any accrued but unused
vacation, reimbursement for any expense reimburseable under this
Agreement, and any other earned but unpaid amounts payable to
Executive hereunder, in each case as accrued through the last day
of Executive’s actual employment by the Company.
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(2)
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For purposes of this Agreement, “
Good Reason ” shall be the occurrence of any of the
following events:
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(A)
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Removal from the position described in Section
1(a) or from his membership on the Board, except for Cause or
following Executive’s Disability;
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(B)
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Any diminution in Executive’s duties or
responsibilities as the chief executive officer of a public
company, except for Cause or following Executive’s
Disability;
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(C)
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Any reduction in the Base Salary or Target
Bonus then in effect, except for a reduction (but not to a level
less than 75% of the level of Base Salary or Target Bonus specified
in this Agreement) consistent in percentage terms with any
across-the-board reduction applicable to all of the Company’s
executive officers;
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(D)
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Any material breach by the Company of this
Agreement or any other legal obligation owed by the Company to the
Executive;
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(E)
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Failure of any successor of the Company to
assume this Agreement as required by Section 9(c); or
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(F)
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A required relocation of Executive’s
primary office location by more than 75 miles.
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If any of these events occurs,
Executive may terminate Executive’s employment for Good
Reason, but only if (i) Executive notifies the Chairman of the
Board in writing specifically identifying the event constituting
Good Reason within thirty (30) days after Executive becomes
aware of such event (and failing such notice such event shall not
constitute Good Reason for purposes of this Agreement);
(ii) the Company fails to cure such Good Reason event within
thirty (30) days from the date the Company receives
Executive’s written notice of such Good Reason event; and
(iii) Executive submits written resignation of employment and all
director and officer capacities within thirty (30) days
following the lapse without cure of the 30-day cure period. A
termination by Executive following cure of a Good Reason event
shall not be a termination for Good Reason. A failure of Executive
to notify the Company after the first occurrence of an event
constituting Good Reason shall not preclude any subsequent
occurrences of such event (or similar event) from constituting Good
Reason.
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(3)
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For purposes of this Agreement, “
Severance Package ” means all of the following items
(A) through (E):
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(A)
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Continuation of Executive’s annual Base
Salary for 365 days following the date of termination, subject
to all applicable federal, state and local withholding and
reporting requirements. These salary continuation payments shall be
paid in accordance with usual Company payroll practices for
executive officers. If Executive terminates Executive’s
employment for Good Reason as a result of a decrease in Base
Salary, then the Base Salary used for purposes of the calculation
of the Severance Package shall be the Base Salary in effect
immediately prior to such reduction.
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(B)
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An amount equal to one hundred percent (100%)
of the Target Bonus in effect on the date of termination, payable
in installments over the 365 day period described in
Section 6(a)(3)(A), subject to the same withholding and
reporting requirements. If Executive terminates Executive’s
employment for Good Reason as a result of a decrease in Target
Bonus, then the Target Bonus used for purposes of the calculation
of the Severance Package shall be the Target Bonus in effect
immediately prior to such reduction.
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(C)
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To the extent not included in the Accrued
Amounts, a pro rata bonus for the bonus period during which
the date of termination occurs calculated at one hundred percent
(100%) of the actual bonus, if any, that the Executive would have
earned under the governing bonus plan for the year of termination
had the Executive’s employment not terminated, multiplied by
a fraction the numerator of which is the number of days that the
Executive was employed during the bonus period and the denominator
of which is 365. Such prorated bonus shall be paid in accordance
with the Company’s customary practices for payment of
executive bonuses.
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(D)
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Accelerated vesting of all stock, stock
options and other equity-based awards granted to Executive that
would have vested if Executive’s employment had continued for
365 days after the date of termination, provided that if an
equity award subject to this accelerated vesting is subject to
Company-performance based conditions or requirements for vesting,
exercise, sale or other realization of value, then such conditions
or requirements will continue to apply and the acceleration
provided by this section shall be contingent upon satisfaction of
such conditions and requirements, and the Company in its discretion
may either delay acceleration or prevent exercise or sale until
such conditions and requirements are met, and cancel the
accelerated award if such conditions and requirements are not
met.
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(E)
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Payment on behalf of Executive, or
reimbursement of Executive for payment of, the cost of continuation
under COBRA of benefits under any group health and dental plans
substantially similar to those which Executive (and, if applicable,
Executive’s family) was receiving immediately prior to
termination of employment, until the earlier of:
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(i)
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the end of the 18-month period following the
date of termination, or
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(ii)
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the date on which the Executive becomes
eligible to receive substantially similar benefits under any plan
or program of any other employer.
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The benefit provided under this
Section 6(a)(3)(E) is subject to the availability of
continuation of coverage under the terms of the applicable plan
documents and all provisions of applicable law, including the
requirements of the federal “COBRA” law, 29 U.S.C.
§ 1161 et seq. with respect to group health and dental
insurance. If Executive is not eligible for such continued coverage
under one of the Company-provided benefit plans noted in this
paragraph (E) that Executive was participating in at the time
of termination of employment, the Company shall reimburse Executive
for the cost of replacement insurance for the duration of the
applicable period, provided the reimbursements for any month shall
not exceed the Company’s monthly cost of providing the
coverage before termination of employment.
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(4)
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To the extent that the right to any payment
(including the provision of benefits) under this Section 6(a),
Section 6(d) or otherwise under this Agreement provides for the
“deferral of compensation” within the meaning of
Section 409A(d)(1) of the Internal Revenue Code (the
“Code”) payable on account of a “separation from
service” that is not exempt from Section 409A of the
Code as involuntary separation pay or a short-term deferral (or
otherwise):
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(A)
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a termination of employment shall not be
deemed to have occurred for purposes of any provision of this
Agreement providing for the payment of any payment or benefits upon
or following a termination of employment unless such termination is
also a “separation from service” within the meaning of
Section 409A of the Code and, for purposes of any such
provision of this Agreement, references to a
“termination,” “termination of employment”
or like terms shall mean “separation from service;”
and
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(B)
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if Executive is a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i)
of the Code, to the minimum extent required by Section 409A of
the Code, no payment or benefit (other than expense reimbursements
made in accordance with the expense reimbursement and in-kind
benefit rules set forth in the regulations under Section 409A
of the Code) shall be made until the date which is the earlier of
(A) the expiration of the six (6)-month and one (1) day
period measured from the date of the Executive’s separation
from service or such shorter period as may be prescribed by
applicable law or regulation, and (B) the date of
Executive’s death (the “Delay Period”). Upon the
expiration of the Delay Period, all delayed payments and benefits
shall be paid or reimbursed to Executive in a lump sum.
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(b) Voluntary Termination by
Executive Without Good Reason . If Executive terminates
Executive’s employment with the Company without Good Reason,
then the Company shall be obligated only to pay the Executive the
Accrued Amounts (less the Guaranteed Amount) in a lump sum within
ten (10) days of termination of employment.
(c) Termination for
Cause . If Executive’s employment is terminated by the
Company for Cause, the Company shall be obligated only to pay
Executive the Accrued Amounts (less the Guaranteed Amount) in a
lump sum within ten (10) days of termination of employment.
Cause shall be determined by the Board acting reasonably and in
good faith. As used herein, the term “ Cause ”
shall be limited to:
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(1)
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Executive’s willful breach of any
fiduciary duty to the Company, or embezzlement, theft or
misappropriation by Executive of any property of the Company or any
of its affiliates;
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(2)
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Executive’s conviction of or plea of
guilty or nolo contendere to a felony, or a crime involving
moral turpitude, fraud or misrepresentation, under the laws of the
United States or any state thereof or any other jurisdiction in
which the Company conducts business, in any case which will result
in significant reputational harm to the Company if Executive
continues, or which indicates that Executive is not suited to
continue, in his role as described in this Agreement;
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(3)
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Executive’s willful failure or refusal
to comply with laws or regulations applicable to the Company or its
business or the policies of the Company governing conduct of its
employees; or willful misconduct or gross negligence in the
performance of Executive’s duties to the Company;
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(4)
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Executive’s willful failure to follow
the Board’s reasonable and lawful instructions; or
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(5)
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a material breach of this Agreement by
Executive;
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provided, however, that (i) Executive shall have the right
to be heard before the full Board regarding any event of Cause, and
Cause shall not be deemed to exist without a finding by the Board
that Cause exists; and (ii) Cause shall arise under items (3),
(4), or (5) above only if (A) the Company delivers
written notice to Executive identifying the failure, refusal,
incompetence, negligence, misconduct, or breach constituting Cause,
and (B) Executive repeats such failure, refusal, incompetence,
negligence, misconduct, or breach at any time following the
Company’s delivery of such notice, or, if such failure,
refusal, incompetence, negligence, misconduct, or breach is capable
of being cured and the Board informs Executive in writing that cure
is required, Executive fails to cure it in all material respects
during the period of thirty (30) days following receipt of the
Board’s notice requiring cure. A termination by the Company
after cure shall not be a termination for Cause. A failure of the
Company to notify the Executive after the first occurrence of an
event constituting Cause shall not preclude any subsequent
occurrences of such event (or similar event) from constituting
Cause.
(d) Certain Terminations
Following a Change in Control . If Executive’s employment
with the Company or its successor terminates for either of the
reasons described in Section 6(a) within two (2) years after a
Change in Control of the Company (as defined below) that occurs
during the Term of Employment, the Severance Package shall be
modified in the following respects:
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(i)
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The amounts provided in
Sections 6(a)(3)(A), (B) and (C) of this Agreement
shall be paid in a lump sum within ten (10) days following the
date of Executive’s termination; and
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(ii)
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Section 6(a)(3)(C) is modified by
replacing “the actual bonus, if any, that the Executive would
have earned under the governing bonus plan for the year of
termination had the Executive’s employment not
terminated” with “the Target Bonus in effect on the
date of termination.”
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Furthermore, in addition to the Accrued Amounts and the
Severance Package, except as otherwise provided in the applicable
award document, Executive shall be entitled to immediate vesting of
all stock options, restricted stock awards and other equity-based
awards granted to Executive and not otherwise vested. For purposes
of this Agreement, a “ Change in Control ” shall
have the meaning set forth in Exhibit B attached
hereto. The provision of the accelerated vesting described in this
Section 6(d) (i) shall be contingent upon the execution and
delivery to the Company by Executive, not later than 45 days
after the date of termination of employment, of the Release, and
(ii) together with payment of the Accrued Amounts and the
Severance Package, shall constitute the sole remedy of Executive in
the event of a termination of the Executive’s employment in
the circumstances set forth in this Section 6(d). Anything in
this Agreement to the contrary notwithstanding, if (q) a
Change in Control occurs, (r) Executive’s employment
with the Company is terminated by the Company without Cause or by
the Executive for Good Reason within 180 days prior to the
date on which the Change in Control occurs, and (s) it is
reasonably demonstrated by Executive that such termination of
employment or events constituting Good Reason (x) was at the
request of a third party who has taken steps reasonably calculated
to effect a Change in Control or (y) otherwise arose in
connection with or in anticipation of a Change in Control, then for
all purposes of this Agreement such Change in Control shall be
deemed to have occurred during the Term of Employment and the
termination shall be deemed to have occurred after the Change in
Control, so that Executive is entitled to the vesting and other
benefits provided by this Section 6(d). It is recognized that
equity awards not vested at the time of or as a result of
termination of employment are cancelled immediately upon
termination of employment, and further that following such
cancellation, Executive may become entitled to vesting of those
cancelled awards in connection with a subsequent Change in Control
pursuant to this section. In that case, the Company or its
successor shall deliver to Executive the consideration Executive
would have received in the Change in Control for (i) the
shares of restricted stock that were cancelled as if those shares
had been owned by and fully vested in the Participant at the time
of the Change in Control, less an amount equal to any repurchase
price paid by the Company for those shares; and (ii) the stock
options that were cancelled as though such options had been vested
at the time of the Change in Control, to the extent that
unexercised vested stock options were cashed out in the Change in
Control, and otherwise for a number of shares of the
Company’s common stock having a value at the time of the
Change in Control equal to the aggregate amount by which those
stock options were in-the-money at the time of the Change in
Control, using for purposes of this calculation the value of a
share of the Company’s common stock in the Change in Control
transaction.
(e) Disability . If
Executive suffers a Disability, the Company may, in its discretion,
terminate the Executive’s employment hereunder. For purposes
of this Agreement, “ Disability ” shall be
defined to occur at such time as Executive becomes eligible to
receive benefits under the terms of the Company’s then
applicable long-term disability policy, or, in the absence of such
policy, shall be defined as a physical or mental disability that
prevents Executive from performing Executive’s duties and
responsibilities to the Company, with any reasonable accommodation
required by applicable law, for forty-five (45) consecutive
days or more, or for an aggregate of ninety (90) days in any
period of twelve (12) months. The commencement date and
expected duration of any physical or mental condition that prevents
Executive from performing Executive’s duties and
responsibilities to the Company shall be determined by a medical
doctor mutually acceptable to Executive and the Company. If
Executive’s employment is terminated by the Company pursuant
to this Section 6(e), then the Company shall pay Executive the
Accrued Amounts in a lump sum within ten (10) days of
termination of employment. In addition, to the extent not included
in the Accrued Amounts, Executive shall receive a pro rata
bonus for the bonus period during which the date of termination
pursuant to this Section 6(e) occurs calculated at one hundred
percent (100%) of the Target Bonus then in effect, multiplied by a
fraction the numerator of which is the number of days that
Executive was employed during such bonus period and the denominator
of which is 365. Such prorated bonus shall be paid in accordance
with the Company’s customary practices for payment of
executive bonuses but with no additional performance requirements
or contingencies.
(f) Death . If Executive
dies during the Term of Employment, all obligations of the Company
to make any further payments, including the obligation to pay the
Accrued Amounts, shall be paid to Executive’s estate, and in
any event all Accrued Amounts shall be paid in a lump sum within
ten (10) days of Executive’s death. In addition, to the
extent not included in the Accrued Amounts, Executive’s
estate shall receive a payment or payments reflecting a pro
rata bonus for Executive for the bonus period during which the
date of termination pursuant to this Section 6(f) occurs calculated
at one hundred percent (100%) of the Target Bonus then in effect,
multiplied by a fraction the numerator of which is the number of
days that Executive was employed during such bonus period and the
denominator of which is 365. Such prorated bonus shall be paid in
accordance with the Company’s customary practices for payment
of executive bonuses but with no additional performance
requirements or contingencies.
(g) Payments as Compensable
Compensation . Any participation by Executive in, and any
terminating distributions and vested rights under,
Company-sponsored retirement or deferred compensation plans,
regardless of whether such plans are qualified or nonqualified for
tax purposes, shall be governed by the terms of those respective
plans.
(h) Executive’s Duty
to Provide Materials . Upon the termination of
Executive’s employment for any reason, Executive or his
estate shall surrender to the Company all correspondence, letters,
files, contracts, mailing lists, customer lists, advertising
material, ledgers, supplies, equipment, checks, and all other
materials, records and property of any kind that belong to the
Company or any of its subsidiaries or affiliates, that may be in
Executive’s possession or under Executive’s control,
provided that Executive shall have the right to retain a copy of
any such documents to the extent such documents relate to Executive
or any of Executive’s rights or obligations respecting the
Company or his service on the Board.
(i) Loss of Severance .
Executive’s right to the Severance Package is subject to
compliance with obligations to the Company, including the
obligations set forth in the Proprietary Information Protection
Agreement entered into by Executive in connection with employment
by the Company (the “ PIPA ”), as stated in the
Release.
7. Section 4999
Excise Tax Limitation .
(a) Safe Harbor Cap .
Anything in this Agreement to the contrary notwithstanding, if
(i) any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the
Company (or any of its affiliated entities) or any entity which
effectuates a Change in Control (or any of its affiliated entities)
to or for the benefit of Executive (whether pursuant to the terms
of this Agreement or otherwise) (the “Payments”) would
be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code (the “Excise Tax”), and
(ii) the reduction of the benefits provided to Executive under
this Agreement to the maximum amount that could be provided to
Executive without giving rise to the Excise Tax (the “Safe
Harbor Cap”) would provide Executive with a greater after-tax
amount than if such amounts were not reduced, then the amounts
payable to Executive under this Agreement shall be reduced (but not
below zero) to the Safe Harbor Cap. The reduction of the amounts
payable hereunder, if applicable, shall be made to the extent
necessary in the following order: the acceleration of vesting of
stock options and other equity awards with an exercise price that
exceeds the then fair market value of the stock subject to the
award, the payments under Section 6(a)(3)(A), the payments
under Section 6(a)(3)(B), the payments under
Section 6(a)(3)(C), and the acceleration of vesting of all
other stock options and equity awards. For purposes of reducing the
Payments to the Safe Harbor Cap, only amounts payable under this
Agreement (and no other Payments) shall be reduced. If the
reduction of the amounts payable hereunder would not result in a
greater after-tax result to Executive, no amounts payable under
this Agreement shall be reduced pursuant to this provision.
(b) Determinations . All
determinations required to be made under this Section shall be made
by the public accounting firm that is selected by mutual agreement
of Executive and the Company and retained by the Company as of the
date immediately prior to the Change in Control (the “
Accounting Firm ”) which shall provide detailed
supporting calculations both to the Company and Executive within
fifteen (15) business days of the receipt of notice from the
Company or Executive that there has been a Payment, or such earlier
time as is requested by the Company. Notwithstanding the foregoing,
if (i) the Board shall determine prior to the Change in
Control that the Accounting Firm is precluded from performing such
services under appli
